Veteran Luxembourg PM leads polls but loses ground

Luxembourg's veteran Prime Minister Jean-Claude Juncker took a clear lead at snap elections Sunday, but after 18 years in office Europe's longest-serving leader lost ground, official figures showed.

Despite the slide, Juncker immediately announced he would try to form a workable coalition government.

His conservative Christian Social People's Party (CSV) led the field with 33.6 percent of the vote -- against 38 percent four years ago -- meaning it looked set to lose three of 26 seats in the 60-member parliament, according to official figures that were almost complete.

"We claim priority to form the next government," Juncker said in a brief statement at party headquarters after a long meeting of the party leadership.

"We are the largest party," he added, calling the CSV's showing "impressive".

The centre-right party has won every election bar one in Luxembourg since its establishment in 1944.

Just under 240,000 people were called to the ballot box in the European Union's richest state per capita for an election brought forward by seven months after the discovery of misconduct in the secret services.

The prime minister's former coalition with the Socialist party splintered over misdemeanours by the SREL spy agency, which Juncker oversees.

The 58-year-old premier came under fire for concentrating too much on his role as head of the eurozone finance ministers during the bloc's debt crisis and taking his eye off domestic issues.

His secret service was accused of a series of scandals ranging from illegal phone-tapping to dodgy dealing in luxury cars.

Casting his vote, Juncker said: "I want the CSV to remain the strongest party so that we can govern for the next five years. If this is not the case, I will be an opposition MP."

Official figures showed the Socialists losing a little ground at 20.3 percent (down 1.3 points), leaving them just ahead of the opposition Liberals at 18.2 percent, who made a sharp gain of 3.2 points.

Outgoing Finance Minister Luc Frieden said it was "far too early" to say what coalition would lead the country in the coming years, though Juncker is expected to hold out a hand to the Liberals.

Liberals, Greens and Socialists could just scrape majority

While voters deem Juncker competent to continue to steer the state, surveys show a younger generation of politicians increasingly picking up support, notably 40-year-old Liberal Party chief Xavier Bettel.

Also expected to make gains was Greens newcomer Francois Bausch, who for the past three years has run the Luxembourg town hall with Bettel. Estimates showed them losing one of seven seats however.

Bettel and Bausch have made no secret of their hopes of forming a coalition government without Juncker's CSV.

But they would need backing from the Socialists, who withdrew their support from Juncker amid the spy scandal.

Socialist leader Etienne Schneider said it was "time for change" on his Facebook page.

"If it's possible to carry out... real reforms aimed at modernising the state and giving it a new impetus, then yes, I'm in favour of a three-way coalition," added Schneider, who has made no secret of wanting to become prime minister.

"Today I really want to become prime minister to give a new dynamic to the country and reform it from top to bottom," said the 42-year-old outgoing economy minister.

According to partial results, the Liberals, Greens and Socialists would have just enough seats to form a majority, with an estimated 32 seats.

On the campaign trail, Juncker hammered home the message that a three-party coalition -- which would be the first of its kind for Luxembourg -- would undermine the nation.

He has nevertheless said he would be prepared to govern in a two-way coalition with the Socialists, Greens or Liberals.

The CSV campaigned on Juncker's experience -- he has spent nearly half his life in government -- and a need for stability in the tiny Grand Duchy wedged between Belgium, France and Germany.

Although the small nation is comparatively wealthy, unemployment has edged up to nearly seven percent and debt has trebled in the past 15 years.

Nine parties in all were running in the elections, from the extreme leftwing Dei Lenk to populist rightwing group ADR.